Microsoft makes bid for Yahoo!

In by far the most significant move that Microsoft has made to gain a foothold in the search and advertising market, the company has bid $44.6 billion for the number 2 search giant, Yahoo! Inc.

Offering $31 per share, a full 62% over and above yesterday’s closing price, Microsoft is attempting to make it very difficult for Yahoo! to ignore the bid, presumably in the hopes that the combined forces of Yahoo! and Microsoft in the search arena can be a viable threat to Google, the company that currently controls ~60% of the extremely profitable market.

Yahoo! has struggled in recent quarters, both in financial terms and in a declining market share, and Microsoft’s MSN / Live search as of last quarter held a meager 3.55% of the market as reported by ComScore.

Advertising is the name of the game in terms of revenue generation for the search giants, and Microsoft has much to gain from Yahoo!’s Search Marketing solution. A solid rival of Google’s Adwords, Yahoo! Search Marketing provides many of the same features and has come a long way over the past year to make advertising easier and more effective. Microsoft’s adCenter has been easily recognized as the inferior of the three advertising systems, presenting difficulties primarily in usability and reach.

While Yahoo! evaluates and decides what course of action to take with respect to the bid, the rest of us will be waiting to see what implications the potential takeover would have in the search landscape.

Corey Koberg

Corey Koberg is a Founder and co-CEO at Cardinal Path where he leads the analysis, data science, media, and product development teams. He is a well-known speaker, having keynoted and led sessions on advertising, analytics, and optimization at conferences and events across the globe. Over the last decade he has taught thousands on the topics of online marketing measurement, statistical analysis, and optimization. He is the author of Display Advertising: An Hour A Day (Wiley, 2012), Google Analytics Essential Training (Lynda.com, 2011) and technical editor of several works, among them Performance Marketing with Google Analytics (Wiley, 2010), Google AdWords Essential Training (Lynda.com, 2011), and Google Website Optimizer Essential Training (Lynda.com, 2010) As a Principal, he has worked with dozens of Fortune 500 companies, such as Google, Chevron, Intel, NBC, Papa John’s, National Geographic, Time Warner, Universal Music, DeVry University, and others, to improve the effectiveness of their online presence through results-oriented, data-driven optimization. Corey holds a degree in electrical and computer engineering from the University of Illinois and has been involved in Internet-related engineering and consulting for over 15 years, beginning his career in the NCSA labs that developed the world’s first web browser. Corey is a proud husband and father of three children and enjoys sailboat racing, downhill skiing, and photography. He is involved on a volunteer basis with the University of Illinois and the local Emergency Response Team.